With an impressive total of 2.6 million car registrations expected in 2016, the UK's new car sales appear to be booming. As usual though, the numbers don't tell the whole story.
Dealer forecourts are littered with so-called ‘self-registered’ or ‘pre-registered’ cars, which can account for up to 30 per cent of all new car sales in any given year. They're generally models snapped-up by dealers as manufacturers incentivise monthly sales targets with big discounts, creating big savings against the list price that can be passed onto the first private owner.
As a result, dealer websites and newspapers are littered with ads, all promising buyers the benefit of an effectively brand new car that may be purchased for a used car price. Often referred to informally as 'ex demo' cars or 'delivery mileage cars', the odometers on such cars can sometimes record mileage in single figures, as they're ferried around dealer networks on the back of transporters.
But before you snap up the first one you see, we’ll guide you through all the pros and cons of purchasing a self-registered car.
Franchsied dealers don’t just sell brand new cars straight from the factory; they have many pre-registered or used models on their forecourts, too. With great finance packages available, it can be a cost-effective way to get the best deal. To stay safe when you hit the dealership for your new motor, Auto Express has compiled 10 top tips with the help of Sue Robinson, director of the National Franchised Dealers Association.
1. Drive before you buy
Make sure you see the car first and check it for any discrepancies to ensure you’re not being fooled. Never commit to buying without driving it, either, so you can get a feel for the mechanical condition of the vehicle, too.
2. Check the registration and MoT certificate are genuine
Ensure that the details quoted are correct, paying attention to the Vehicle Identification Number (VIN). You should also check the previous owners listed on the registration document match what you’ve been told. To check the details on a registration document match the official record, you can use the DVLA's online service. For MoTs, go to www.gov.uk/check-mot-status.
3. Check its service history
Call the dealer whose stamp appears opposite the last service in the car’s records. Explain why you’re ringing and ask it to verify the work.
4. Check the guarantee
With a second-hand vehicle, you’ll usually get a year’s warranty – less if the car is older. Check what’s offered and consider purchasing extra
cover to ensure you’re protected.
5. Check for outstanding finance payments
If someone sells you a car that still has outstanding finance on it, the title or ownership of the vehicle still resides with the finance company, which could repossess the vehicle.
6. Check the mileage
If you are sold a car with incorrect mileage, it can impact on the car’s value and factors such as when the cambelt should be replaced. You can check the car’s mileage at every MoT for free at www.motinfo.gov.uk.
7. Make sure you tax it
In the past, a tax disc would have shown you how much VED was remaining. Now, tax expires on sale so you’ll need to buy it straight away. If the vehicle isn’t taxed and has a Statutory Off-Road Notification (SORN), be sure to check when that expires.
8. Look under the bonnet
Inspect the oil and all hoses for any leaks or loose connections. Be wary if the engine bay is too clean – it may have been cleaned to hide something.
9. Look under the car
Don’t lie down in the road, but see if there are any oil or coolant leaks on the surface underneath. Also check the car sits level on its springs and that all the tyres are equally worn and road-legal.
10. Make sure the seller provides full contact details
Franchised dealers or local garages are most commonly used, but if you’re dealing with a private seller, make sure you have their contact details, including a landline to reach them on as this places them at a specific location.
Philip Nothard from used car pricing and technical expert CAP Automotive warned us: “Don’t be talked into buying a pre-reg if you had intended to buy brand new or an older second-hand car. Make sure you get what you want.”
If you’re looking to part-exchange your current vehicle, get independent valuations first to ensure a comparable price, and check the list price of any potential buys to confirm the savings being offered.
We asked Nothard if there is anything else to consider before making that final decision. “These heavy discounts do undoubtedly have a knock-on effect on the price of other cars on the forecourt, plus not being the first registered owner is likely to reduce the value when you sell on,” he explained.
“Shop around. Although the pre-reg price may look great, there are also some good finance deals around, such as PCPs (Personal Contract Plans) with big dealer contributions, which could mean it makes more sense to buy brand new. It all depends on how you intend to finance the car and how long you plan to keep it for.”
The process of self- or pre-registering involves a dealership buying new cars from the manufacturer and registering them to itself. This means that the dealer is technically the first owner on the registration document, the car already has a number plate and is sitting on the forecourt.
The car is officially classed as ‘second-hand’, even though it may only be weeks old with just delivery miles on the clock. Dealers tend to offer these vehicles periodically, normally with great savings, in order to reduce their stock.
When buying a new car, you can choose the exact spec and options you want, often paying full price and waiting weeks for delivery. But with ‘pre-reg’, what you see is what you get – only the cars already in stock are available. Still, knowing the dealership is keen to sell gives you power to haggle for a greater discount and extras, plus you’ll enjoy immediate delivery.
As well as looking for the right car to buy, there’s also the right time to buy. The best time is when dealerships need to sell their ‘old’ stock, mostly following a new registration issue every March and September. Each dealership also has different targets to meet and manufacturers’ incentives to realise, and so deals are often available at the end of the month or quarter.
However, we found many of these cars aren’t labelled as self-reg in their adverts. If you see a ‘new’ car that is heavily discounted, already has a number plate and very low mileage, it’s likely to be a self-reg, so ask the salesman to confirm this.
Firstly, make sure you leave the dealership with all the relevant paperwork. Carefully check the details on the sales receipt and part-exchange invoice, particularly any extras you negotiated. You will be asked to sign section eight of the V5C registration document, so ensure it shows the correct mileage as this will help when selling the car on.
You will only be given section 10 (V5C/2). Don’t leave without this – if the dealer suddenly goes bust, it may be hard to prove you own the car without it. It’s the dealer’s responsibility as the current owner to send off sections one to eight. You will then receive the new registration document from the DVLA in a few weeks.
Despite all our homework, one issue still tripped us up. The dealership’s advert stated that the Vauxhall Meriva we were interested in came with a lifetime 100,000-mile warranty, but the manufacturer’s terms and conditions led us to believe this only applied to the first registered owner.
However, the salesman assured us they would get it transferred to us, so we went ahead and waited for the manufacturer’s confirmation.
Six weeks and many calls to the dealership later, we’d received nothing, so we took the matter into our own hands. We contacted the manufacturer’s warranty department and, although it was very helpful, we still had to send numerous e-mails and a copy of the registration document – as proof of new ownership – before it would issue the warranty document.
We hadn’t anticipated having to sort this out ourselves, but believe the problem was just the result of a communication breakdown between the dealer and manufacturer.
Nothard’s final piece of advice is key to ensuring your car is fully covered: “Read the small print – some manufacturers’ warranties are on the car, which don’t need transferring; others are on the registered owner, which will.”
The Meriva we chose came with a saving of £3,500, extras such as a spare wheel and mats, and a 40 per cent reduction on paint and body protection. It was eight weeks old, with 37 miles on the clock, and had all the spec we were after – we happily settled for Pearlescent Waterworld Blue paint as the only real compromise. In fact, the warranty confusion was the only hiccup.
So would we do anything differently next time we buy a pre-reg car? Well, we’d negotiate even harder, especially if the salesman is keen to do a deal, and we might get an even bigger bargain.
• Write down your ‘must-haves’ before going to the dealership
• Doing your homework gives you confidence to negotiate
• Keep the dealer’s ad as proof of the offer – especially the warranty
• Don’t leave the dealer without Section 10 of the registration document V5C/2
• Get written confirmation regarding the transfer of the car’s warranty
• Fast delivery
• Great discounts
• Scope to haggle on price
• You can negotiate for extras – if you don’t ask, you don’t get
• A pre-reg car is a ‘used’ car
• Colour choice is limited
• What you see is what you get – customisation isn’t possible
• Not being the first registered owner could affect resale value
• Check mileage and panels; even pre-reg cars may be damaged
• Depending on the registration date, any remaining manufacturer warranty, road tax or breakdown cover will be reduced
Have you ever bought a pre-registered car? Tell us about your experiences in the comments section below...